Tuesday, January 30, 2007

Home Buying Process (3) Lenders; Pre-Approval

1. Why is this after finding a REALTOR®? Why can’t I find a lender first?

Of course you can find a lender first. If you’ve worked with someone you trust, or if you have a recommendation from someone you trust, by all means sit down for a consultation. The main point is you must consult with a broker and have a pre-approval letter before you look at your first house.

2. Why?

Several reasons: First, you need to know accurately how much you can afford. There are many loan products available that, depending on your credit history, might fit your situation better than a standard 30 yr fixed mortgage, thus raise your ceiling, and a good broker can give you the options.

Second, if there’s anything in your credit history that needs correcting or repair, the earlier to know the better.

And third, if you find something you like no offer will be accepted without a pre-approval letter.

3. And if I don’t know any Mortgage Brokers?

All good real estate agents have a list of people they trust to do the best for their clients, especially knowing a bad broker can be a nightmare to a transaction. Ask for two or three names.

Then go through the same process as in finding a REALTOR®. Interview, look for honesty, knowledge and dedication.

Incidentally, do not be drawn only by price. Just as with a REALTOR®, competence is critical.

4. OK. Good information. Not to change the subject, but I’ve been meaning to ask: what’s that circle R thingy?

By REALTOR? That’s a registered trademark. The term REALTOR® can only be used by members of the National Association of Realtors.

5. Is that good?


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